The network for agriculture in Ontario, Canada
Grocery Bill Up - Farmers Share Down
Here's a story from the 3 big general farm organizations out west...
Consumers paid $6.01 more for the same basket of groceries in 2009 than 2008, while farmers received 86 cents less, according to "The Farmers' Share" research project conducted by Keystone Agricultural Producers, the Agricultural Producers' Association of Saskatchewan and Wild Rose Agricultural Producers. A 3.2-per cent-increase in grocery cost was accompanied by a 1.7-per-cent decline in farmer returns.
Consumers paid $6.01 more for the same basket of groceries in 2009 than 2008, while farmers received 86 cents less, according to "The Farmers' Share" research project conducted by Keystone Agricultural Producers, the Agricultural Producers' Association of Saskatchewan and Wild Rose Agricultural Producers. A 3.2-per cent-increase in grocery cost was accompanied by a 1.7-per-cent decline in farmer returns.
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Replies to This Discussion
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Permalink Reply by Frank Borszcz on
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You can put whatever spin on this conversation you wish. At the end of the day, like always its the farmer who lose out. Farmers tend to be the easy scape goat thats for sure.City people don't seem to get it. I am sure there are alot of city people that do get it as well. This is a funny story my mom told me, she overheard this comment at the check out line in a grocery store in London Ontario. The customer was complaining to the cashier about pricing " I don't care what happens to Farmers I get all my food at the grocery store". Need I say more.
In the 70's my dad was getting $4 bu for corn and input prices were decent, low back then, farmers were making money. Today were lucky to get $4 to $4.50 for a bu corn and our input prices are 4 to 5 times higher then in 1970. So to put things into perspective, if the price of corn/bu were to follow the cost of production like it should. Then corn should be $20-$24/bu right? Just something to think about.
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Permalink Reply by John Schwartzentruber on
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Well Frank, it seems that what we have been taught to believe over the years is that we need to become more efficient more efficient more efficient more efficient more efficient more efficient . . .oh excuse me, was I repeating myself?
The bottom line is this - at some point, efficiency counts for nothing at all if the marketplace becomes comatose. A prime example is the super-efficient pork production system. Not much joy in their Mudville tonight.
The Canadian beef industry, of which I am a part, does not need the staggering imports from Uruguay and Australia (up by double from last year) and Ontario beef producers cannot compete with the low-priced product shipped in from Quebec producers who are the beneficiaries of a guaranteed floor price system. ( Does it not just thrill your soul to see our federal transfer payment dollars go to a good cause?)
The reality is that the giant corporations who have no sense of nationalism will move product around the world in ways that maximize their profits. They could not care less if the producers in any particular country bleed their equity into the soil they farm. These oligarchs don't necessarily mean anyone any harm, in fact, they not likely even notice the collateral damage caused by their relentless drive for net return. They are without conscience or scruples.
And they are in full control of the price we receive for the product leaving the farm gate..
Frank Borszcz said:You can put whatever spin on this conversation you wish. At the end of the day, like always its the farmer who lose out. Farmers tend to be the easy scape goat thats for sure.City people don't seem to get it. I am sure there are alot of city people that do get it as well. This is a funny story my mom told me, she overheard this comment at the check out line in a grocery store in London Ontario. The customer was complaining to the cashier about pricing " I don't care what happens to Farmers I get all my food at the grocery store". Need I say more.
In the 70's my dad was getting $4 bu for corn and input prices were decent, low back then, farmers were making money. Today were lucky to get $4 to $4.50 for a bu corn and our input prices are 4 to 5 times higher then in 1970. So to put things into perspective, if the price of corn/bu were to follow the cost of production like it should. Then corn should be $20-$24/bu right? Just something to think about.
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Permalink Reply by Peter Gredig on
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So Burnt, if the problem is excessive efficiency and multi-national companies, what is the solution??
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(I am dropping the sign-in name in favor of my own.)
Has "the problem" actually been named?
I'm not sure if "excessive efficiency" can be called a problem. I am saying that it is not a solution to making a decent livelihood in farming. Unless someone can show me otherwise without disregarding the rate of attrition and practically geriatric ages of those who remain in agriculture.
How to deal with the multinationals? Just bend over.
If one doesn't like that position, then be prepared to work very hard and develop your own markets.
If you do choose that path, then good luck with that 5000 acres of beans and corn.
What are your opinions as to the real cause of the low-return situation we have today?
John Schwartzentruber,
Brussels.
Peter Gredig said:So Burnt, if the problem is excessive efficiency and multi-national companies, what is the solution??
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Permalink Reply by Wayne Black on
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Low interest rates.
When we have low interest rates the rate of return on investments simultaneously drop also. This is a natural occurrence in the world of business. The returns at most "commodity" institutions drop also - not just farming. To us it appears as though we are the losing factor in the food equation.
A common theme that my father always used when people "complained" that dad was getting rich as a dairy farmer - "here is the farm - you go milk the cows." No one took him up on the offer.
So that being said - go start processing food from the farmer if being a processor looks so great.
Farming is difficult to get started in because there is a high demand to buy farms. I have six friends who want to farm. When we need to cut back on pork production globally (global issue, not just Ontario), quota is restricting farmers from getting into producing excess poultry products or milk, there is only so much land for growing crops... you see the trend.
Another thought - if and when we raise the net income for farmers to match other non-farmers... what is to stop the rapid expansion of "Wayne Black Incorporated"? We need to limit growth on farm operations. How is that? With quotas (but that has been fought and won) or limit payments from government programs? Any other ideas?
I am not saying this to throw mud at anyone - I would like a better explanation so that I can explain it to the non-farmer. I already had this conversation yesterday with a non-farmer who thinks we need smaller farms and more farmers.
John said:(I am dropping the sign-in name in favor of my own.)
What are your opinions as to the real cause of the low-return situation we have today?
John Schwartzentruber,
Brussels.
Peter Gredig said:So Burnt, if the problem is excessive efficiency and multi-national companies, what is the solution??
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This almost sounds like farmers are their own worst enemy. When things are good we push to be more profitable, when times are bad we keep the production but learn how to cut the cost to produce. We have learned how to feed the nation or world and have figured out how to do it very cheaply. But lets start looking at populations, the average age of farmers is increasing along with the rest of society. As we age and don't do as much manual labour our need for food decreases. If you put a declining aging population against an increasing ability to produce food something has to give, unfortunately it is the farmer the price taker. We can always do as we have always done or we can go into the major cities and study what they are actually eating. If we do that the inventor in everyone will come out and we will realize what the crops and food that need to be produced are. The farmers feed cities slogan is a very good thing, but the more important part that is forgoten is that cities feed farmers! Value added or not if we don't meet the up and coming markets we(all comodities, supply management included) will never move ahead.
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Good points.
Brent Royce said:This almost sounds like farmers are their own worst enemy. When things are good we push to be more profitable, when times are bad we keep the production but learn how to cut the cost to produce. We have learned how to feed the nation or world and have figured out how to do it very cheaply. But lets start looking at populations, the average age of farmers is increasing along with the rest of society. As we age and don't do as much manual labour our need for food decreases. If you put a declining aging population against an increasing ability to produce food something has to give, unfortunately it is the farmer the price taker. We can always do as we have always done or we can go into the major cities and study what they are actually eating. If we do that the inventor in everyone will come out and we will realize what the crops and food that need to be produced are. The farmers feed cities slogan is a very good thing, but the more important part that is forgoten is that cities feed farmers! Value added or not if we don't meet the up and coming markets we(all comodities, supply management included) will never move ahead.
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Permalink Reply by OntAG Admin on
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This Thanksgiving, Be Thankful for Canadian Farmers
By Ron Bonnett, CFA 1st vice president
The rising cost of food was a topic that ranked high in the minds of Canadians this year. As a farmer and 1st vice president of Canada's largest farm organization, I am often asked: "How much of what I pay in the grocery store goes back to the farmer?" The Farmers' Share, a recent study commissioned by Manitoba's Keystone Agricultural Producers (KAP), Saskatchewan's Agricultural Producers Association (APAS), and Alberta's Wild Rose Agricultural Producers (WRAP), sheds some light on this question. The Canadian Federation of Agriculture hopes that this Thanksgiving season, families will pause and appreciate their local farmer as they comb through grocery store aisles.
While Canadian farmers still provide some of the most affordable food in the world, the amount that returns to the farm gate is relatively small. The report showed that, on average, only 27 per cent of the cost of an entire week's worth of groceries for a family of four goes back to the farms where the food is produced. Although there was a rise in the cost of groceries by 3.2 per cent from 2008 to 2009, the average farmers' share decreased by 1.7 per cent from the previous year. While consumers paid $6.01 more for groceries, the farmer received $0.86 less, and the middleman received $6.87 more.
The farmers share does vary significantly between food products. However, this should not be interpreted to mean that some farm sectors are not feeling the price squeeze. The number of steps in the chain between consumers and producers, variations in the costs associated with producing different commodities and differences in the shelf life of some farm products are just some of reasons for variations between different farm products.
In this study, 89 per cent of the foods analyzed are listed as being produced in Canada. To ensure that consumers are able to identify Canadian food products and support our agriculture sector, the CFA will continue to advocate for effective ingredient-based 'Product of Canada' guidelines that are both informative to the consumer and practical to the agri-food industry.
Farmers not only produce food, but they are environmental stewards as well as business owners. Canadians continue to receive high quality food produced at the highest food safety and environmental standards because farmers re-invest in food safety, environmental and animal welfare initiatives on their farms. Factors such as the rising cost fuel and fertilizer, as well as utilities, wages, and other services all put a strain on the farmer's bottom line.
The items listed below often make up a typical Canadian Thanksgiving meal. It is interesting to note the relatively small farmer's share of these products. Click here to view the full report.
Choosing locally-produced foods cuts down on the transportation costs and re-invests in the local economy. The CFA hopes that Canadians will support their local farmers and demand locally sourced products at a time when farmers need them the most. The CFA hopes that Canadians appreciate the value of the Canadian agriculture industry and the farmers who help put meals on their tables.
This harvest season, be an informed consumer. Support your local farmer.
Background Information
The Farmers' Share
The average Farmers' Share in this project is 26.25%. The share does vary significantly depending on the specific food, and even between food groups:
2009 Farmers' Share 2008 Farmers' Share
Vegetables and Fruit 25% 29%
Milk and Alternatives 53% 47%
Meat and Alternatives 22% 28%
Grain Products 5% 4%
Featured Products and the Farmers' Share
Total Cost Farmers' Share
2008 2009 2008 2009
2 Loaves of Bread $5.74 $4.54 $0.26 $0.22
900 g Cheese $16.11 $14.82 $7.38 $8.02
2 cups of Red Pepper $3.99 $4.99 $0.40 $0.26
600 g Turkey $11.25 $11.25 $1.74 $1.74
600 g Sirloin Tip Beef * $4.61 $9.15 $2.05 $2.05
1.2 kg Strawberries $7.98 $9.78 $1.64 $1.31
1.5 L Yogurt $5.77 $5.01 $1.34 $1.47
700 g Oatmeal $2.35 $3.30 $0.08 $0.05
*Indicates the main change from 2008 to 2009 during which there was a dramatic rise in pork and beef prices, but a reduction or no change in money received by pork and beef producers. As a result, the farmers' share decreased considerably.
About the Canadian Federation of Agriculture
Founded in 1935 to provide Canada's farmers with a single voice in Ottawa, the Canadian Federation of Agriculture is the country's largest farmers' organization. Its members include provincial general farm organizations, national and inter-provincial commodity organizations, and cooperatives from every province. Through its members, CFA represents over 200,000 Canadian farmers and farm families.
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